The dismissal marks one of the most dramatic designer flameouts in recent history, and interrupts a spectacular career, robbing fashion of one of its greatest showmen.

It will surely spark debate about whether the 50-year-old British iconoclast will be able to rebound from the taint of anti-Semitism, overcome what appears to be alcohol addiction and rehabilitate his image to resume working in fashion.

It could also set in motion a reshuffling of designers at the highest levels of international fashion, as one of the most coveted and high-profile jobs in Paris is suddenly up for grabs.

It is understood that Dior — reeling from Galliano’s fall from grace within the space of a week — has yet to turn its attention to the delicate issue of succession and, in a sign of continuity, plans to go ahead with its fall fashion show slated for Friday in a tent erected in the gardens of the Musée Rodin here.

Sources said it has yet to be decided if Sunday’s show for the John Galliano line will go ahead. Meanwhile, Galliano’s Italian licensing partners are said to be reeling in the wake of the crisis and uncertainty about that brand’s future.

The final straw for Galliano — the target of two complaints to Paris police of racist and anti-Semitic remarks — was an amateur video depicting the designer, plainly inebriated, hurling expletives and insults, including references to people being “gassed.”

Natalie Portman, a face for Christian Dior Parfums, issued a statement Tuesday morning saying she was “shocked and disgusted” by the amateur video, obtained by British tabloid The Sun and circulated around the world. Its genesis and circumstances remain a mystery.

“As an individual who is proud to be Jewish, I will not be associated with Mr. Galliano in any way,” Portman said. “I hope, at the very least, these terrible comments remind us to reflect and act upon combating these still-existing prejudices that are the opposite of all that is beautiful.” She made no mention of Dior.

Hours later, Dior said it had commenced termination procedures in the wake of the “deeply offensive statements and conduct by John Galliano” portrayed in the video.

“We unequivocally condemn the statements made by John Galliano, which are in total contradiction to the long-standing core values of Christian Dior,” Sidney Toledano, chairman and chief executive officer of Christian Dior Couture, said. He declined to comment further.

According to sources, Galliano is expected to issue a statement today.

Photos of a pale and shell-shocked Galliano arriving at a police station in the Marais to meet his accusers were splashed all over newspapers around the world on Tuesday, often sharing the front page with stories about mounting pressure on Libyan leader Muammar Gadhafi to step down.

Galliano spent Monday afternoon at the station as part of an ongoing police investigation into claims he uttered anti-Semitic and racist remarks in separate altercations at trendy Paris cafe La Perle, last Thursday night and last October.

The designer claims he never uttered any racist or anti-Semitic slurs, furnished witness statements to back his case and subsequently filed a claim of defamation, insult and menace against Géraldine Bloch, 35, and her companion at the cafe, Philippe Virgiti, 41. The couple claimed Galliano’s insults included “dirty Jewish face” and “Asian bastard.”

Under French law, the penalty for defamation can be one year in prison, a fine of 45,000 euros, or $61,884 at current exchange, or both. For insult, the sentence may be six months imprisonment and a fine of 22,500 euros, or $30,942, or one of those penalties.

A spokeswoman from the prosecutor’s office on Tuesday confirmed the police inquiry into the Galliano case has not yet been wrapped up.

“I think there are still some people to hear,” she continued, adding she believes the legal process will be rather quick, without giving a specific timeline.

The ouster of a designer who has left an indelible mark on Dior — and on the history of fashion — left designers, editors and retailers stunned and saddened.

Many were puzzled by the incongruity of Galliano’s warmhearted, polite disposition and the vile pronouncements captured on camera. Others deemed his behavior and words scandalous and damaging to the industry.

In a posting on the Vogue Italia Web site, editor in chief Franca Sozzani wrote: “I am against and I condemn any kind of racism or any behavior that shows disrespect toward any religion.”

But she also lashed out at the people who filmed a plainly inebriated Galliano, whose speech was slurred. “If you are truly fighting with someone, you don’t have time to pick up a mobile phone, turn on the video giggling and mockingly film what he is saying,” Sozzani wrote. “I’m just as disgusted by these people who saw what state John was in and took advantage of the situation by trading on his name and notoriety. While I condemn John’s words, I think they were said in a certain moment when he wasn’t lucid. I am frightened by how quick these young people were to try to gain notoriety or money while destroying the image of a genius.”

Joan Burstein, owner and founder of Browns in London, and a longtime supporter who bought Galliano’s entire graduate collection in 1984, said, “I am deeply saddened by the fact that John Galliano has been dismissed. I hope that I have the opportunity to see him face-to-face, as I have no comment to make until I am told the truth by him.”

“All I can say is that he was and is a brilliant designer, and I hope that fashion will have some memories,” said Maria Luisa Poumaillou, fashion director at Printemps. “Everyone is sad, and the only thing I’m certain of is that he did an amazing thing for Dior and he gave so much pleasure. I will miss him a lot.”

Alexandra Shulman, editor in chief, British Vogue, said, “I think Galliano made a terrible mistake and such offensive behavior could not be ignored. It is all the same true that he has a huge talent and has contributed enormously to the resurrection of the house of Dior.”

Patricia Field sent an e-mail blast to 500 friends, blogs and media on Tuesday in support of Galliano. In a phone interview, she described the designer’s controversial video as “farce” and said she was bewildered that people in the fashion community have not recognized it as such.

“People in fashion, all they do is go and see John Galliano theater every season. That’s what he gives them. To me, this was the same,” she said. “But people in fashion don’t recognize the farce in it. All of a sudden they don’t know him. But it’s OK when it’s Mel Brooks’ ‘The Producers’ singing ‘Springtime for Hitler.’ ” Field said Galliano was “acting out a character.”

Franco Penè, chief executive officer of Gibò Co. SpA, which produces the John Galliano men’s and women’s collection, urged that justice should be allowed to take its course. However, he added, “Neither I nor anyone in the company has ever seen anti-Semitic behavior from Galliano, nor was there any inkling ever of anti-Semitism in his attitude.”

Karl Lagerfeld, meanwhile, came out swinging.

“I’m furious, if you want to know. I’m furious that it could happen, because the question is no longer even whether he really said it. The image has gone around the world. It’s a horrible image for fashion, because they think that every designer and everything in fashion is like this,” Lagerfeld said. “This is what makes me crazy in that story.

“The thing is, we are a business world where, especially today, with the Internet, one has to be more careful than ever, especially if you are a publicly known person. You cannot go in the street and be drunk — there are things you cannot do,” he continued. “I’m furious with him because of the harm he did to LVMH and [chairman and ceo] Bernard Arnault, who is a friend, and who supported him more than he supported any other designer in his group, because Dior is his favorite label. It’s as if he had his child hurt.”

A club kid from South London via Gibraltar, Galliano hit the international fashion radar right out of the starting blocks upon graduation from Central Saint Martins. With his theatrical flair and romantic inspirations of epic proportions, Galliano immediately became one of the darlings of editors and retailers, famous for his bias-cut gowns, innovative tailoring and a cheeky, streetwise edge.

Commercial success didn’t come as easily. Based in London early in his career, Galliano struggled throughout the Eighties and early Nineties, with a succession of backers. He had to close his business three times after they withdrew their financing because of slow sales growth.

Still, his technical virtuosity and knack for making fashion headlines attracted the attention of Arnault, who tapped him in 1995 to succeed Hubert de Givenchy upon his retirement, moving the British maverick to Dior a year later. “Mr. Arnault is a true visionary to put someone like myself in my position,” Galliano told WWD in an interview in 2007. “Many houses have copied that since.”

Galliano quickly woke up the brand with his bravado, a broad spectrum of fashion expression and a soaring imagination.

He has characterized his shows around 1999 and 2000 as “rupture” moments for Dior, including the so-called “Matrix” couture collection that announced a tough-chic moment, and a hip-hop flavored, Lauryn Hill-inspired show that arrived at the onset of logo mania. He has also sent trailer park babes, bruised boxers and rockabilly types down Dior’s ready-to-wear runway.

His signature collections have been no less spectacular, from Bollywood beauties dusted in colored powders to a charming, oddball parade of childlike cardboard floats and clothes deliberately too big for the models.

During his early years at Dior, Galliano had a broad creative purview that extended to advertising and the Dior Parfums beauty division. In a 1997 collaboration with photographer Nick Knight, he had Brazilian bombshell Gisele Bündchen in a sweaty, sexy entanglement with model Rhea Durham, prompting cries of lesbian chic.

“That was really, you could say, the beginning of full-throttle forward,” Galliano recalled in the 2007 interview. A few seasons later, Bündchen was sweating again in a Dior campaign, this time also smeared with grease, fixing an old Cadillac.

Since 2007’s suit-driven “back-to-basics” collection, Galliano has churned out more ladylike and commercial rtw, and ratcheted up references to Dior icons, like the bar jacket, equestrian looks, English men’s wear fabrics and the color gray.

Still, the couture image of Dior, masterminded by Galliano, is crucial across the company, including the powerhouse Dior Parfums, part of LVMH.

Galliano’s famous inspiration trips to India, China, Japan, Turkey, Egypt, Middle Europe and within France brought rich rewards to his audience — and created some of the most arresting fashion show imagery the industry has ever seen. The designer’s immersion into the story lines behind his collections — be it the hidden life of Wonder Woman, the soirees of the Marchesa Casati or the paintings of Clovis Trouille — was absolute, which is what made his shows unmissable and memorable.

Galliano’s ouster, which comes about a year after the suicide of Lee Alexander McQueen, could usher in an era of toned-down fashion shows, as designers came under pressure during the economic downturn to trim budgets.

Dior has been taking a minute-by-minute approach to the fast-evolving crisis to protect its $1.1 billion fashion franchise, and safeguard Arnault’s most treasured fashion property.

Shares in Christian Dior SA, the publicly traded holding company for the Dior fashion house and luxury conglomerate LVMH Moët Hennessy Louis Vuitton, ended up 0.2 percent in trading Tuesday on the Paris Bourse to close at 104.65 euros, or $144.25, while shares in LVMH rose 0.9 percent to 115.30 euros, or $158.93.

“As far as Dior is concerned, I wouldn’t worry too much. It won’t be difficult for them to find new talent — it’s every designer’s dream to create for Dior,” said Luca Solca, a senior analyst with Bernstein Research in Zurich. “And I don’t think Galliano’s comments will damage the brand. It is important for Dior to choose the right creative director — and it will definitely be a breath of fresh air. This has also been free advertising for the brand.”

Toledano has been leading an upscaling drive at Dior in recent years, in its products, stores and marketing. The strategy has been gaining traction. Revenues grew 15 percent in 2010 to 826 million euros, or $1.1 billion, while profits vaulted 169.2 percent to 35 million euros, or $46.5 million, as reported.

Branding and other experts said Dior is likely to rebound from the crisis, especially at a time when large luxury players have put their brands ahead of their star designers.

Sara Rotman, creative director and owner of MODCo Creative, likened Dior without Galliano to Gucci without Tom Ford. She said at first, “I think we all held our breath and thought, Oh my God, how is that going to work? And there was a season when it was a little bit tentative, and I think that they’ve come back strong.”

She characterized Galliano as “one of the few geniuses really left in our field.…But I think that the houses are getting really smart about it and soldiering on. I mean, when we lost McQueen, I thought the same thing — My God how are they going to make it? — but the first collection without him is actually quite strong. So I think the houses have a pretty good sense of who they are, and I think it took an enormous amount of strength of character for [Dior] to ask [John Galliano] to step down.”

“As we witnessed with Kate Moss’ past transgressions, brands must quickly remove themselves from the negative publicity,” said Meg Asaro, cultural curator at brand image developer Toniq. “Dior is a strong brand with a long-standing lineage. Therefore, it will easily rise above this speed bump in its path. Look at Martha Stewart, a brand whose identity is that much closer [to the founder] than that of John Galliano and Dior. Martha Stewart bounced back, and so will Dior — but much quicker.”

The John Galliano business, based on a licensing model, has also been on a growth track, but it is more intricately linked to the madcap designer, and is majority controlled by Dior.

Immediate fallout included the scuttling of a Galliano fragrance launch event scheduled for Germany next week, according to sources.

Public relations experts were divided on whether Galliano could emerge from the crisis to resume what had been a stellar fashion career.

“I think Galliano needs to justify what he’s done,” said Max Clifford, a London-based p.r. and damage-control expert. “He needs two or three Jewish friends to come forward and tell the public that he is not remotely anti-Semitic in all the years they have known him. Or he has to say it was meant to be a funny rant, or that he was just trying to annoy to the people sitting next to him.”

Asked if a public apology would help, Clifford said not necessarily: “In a perfect p.r. world it would, but then look at Mel Gibson. He apologized and it did not enhance his career; nor did it destroy it.”

Moira Benigson, managing partner at the London-based executive search firm The MBS Group, said an apology should have come sooner. “Had he done so, his experience would have been a walk in the park compared to Tiger Woods, for instance.” As for Galliano’s future, she said: “I don’t know what state of mind he’s in right now, but I am sure that someone will snap him up. This will definitely not cause long-lasting damage. Galliano is so important to the industry, and he has so many friends and supporters who will stand by him.”

Ilaria Alber-Glanstaetten, ceo of the London branding consultancy Provenance, said the designer “needs to be extremely repentant, check himself into rehab for addiction and anger management, and lay low for a long time. It’s true that a lot of people do come back from scandals, but there have not been mistakes of this kind before. Honestly, I don’t know if people can stand by those who make statements of the kind that Galliano made.”

Karen Harvey, ceo of Karen Harvey Consulting Group, said Galliano “would need to make major changes on a personal level if he wanted to have a future in the business. I don’t think these things are ever truly forgotten — especially this case.”

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